KS TECH LTDir.zaobao.com.sg/ksenergy/sim-pages/kstech2001ar.pdfOn 6 December 2001, Mr Chew Thiam...

KS TECH LTDNo. 4 Tuas Ave 5 Singapore 639331Tel: 65-6415 0808 Fax: 65-6898 4418Email: [email protected]: www.kstech.com.sg

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KS TECH LTD

To be the leadingone-stop supply centre in Asia

Annual Report 2001

CO

NTEN

TS

Company’s Profile 01

Chairman’s Statement 02

Corporate Information/Significant events for 2001/2002 05

Financial Highlights 06

Statement of Corporate Governance 07

Directors’ Report 09

Statement by Directors 15

Auditors’ Report 16

Income Statements 17

Balance Sheets 18

Consolidated Statement of Changes in Equity 20

Statement of Changes in Equity-Company 21

Consolidated Cash Flow Statement 22

Notes to the Consolidated Cash Flow Statement 24

Notes to the Financial Statements 25

Statistics of Shareholders 48

Notice of Annual General Meeting 50

Proxy Form

KS TECH LTD annual report 200101

COMPANY’S PROFILE

Established in 1974, KS Tech Group continues to

be in the forefront in the supply and services of

equipment, parts and spares for the oilfield,

refinery, marine industries and industrial plants.

KS Tech Group’s principal business segments are:

•Oil & Gas

•Marine

•Others

With the fast changing global business

environment, we are positioning ourselves to take

advantage of the new opportunities in China and

the emerging markets. We have grown over the

years from a domestic hardware dealer to one with

offices in China, Vietnam and East Timor supported

by 170 dedicated, experienced and knowledgeable

employees. Our accreditation to ISO 9002 in 1997

for product services and supplies bear testimony

to our dedication in being the best single source

for customers. KS Tech Ltd was listed on the

Singapore Exchange Securities Trading Limited

(SGX) on 6 August 1999.

On March 2002, the Company was transferred from

SGX-SESDAQ to SGX Mainboard.

CHAIRMAN’S STATEMENT

The Year in ReviewOn behalf of the Board of Directors, I am pleased to present KS Tech Ltd’s Annual Report and the auditedaccounts for the financial year ended 31 December 2001.

FY2001 was a significant year for the Group. We moved with vigor to expand and executed the key strategiesthat management had embarked on. These strategies were outlined in my Statement last year.

Essentially, we moved further into our target markets and entered high-growth areas where we established astrong competitive position. We broadened and deepened our market penetration and won new customerswhile continuing to serve existing ones. Our product offering was enhanced with several new agency linesadded. We also improved our distribution channels and adopted more advanced management techniquesin our sales organization. Costs were kept under control, financial discipline maintained and the Group’soperations rationalised. The physical consolidation and centralisation of the Group’s operations during theyear also resulted in favorable synergies, better control and increased operating efficiency.

The sum effect of these efforts and initiatives were reflected in our strong financial performance. Our results,when viewed against the backdrop of slowing economies worldwide and the poor business sentiment allround, were indeed remarkable and indicate that we are on track to become the leading one-stop value-added supply centre for the Oil & Gas and marine industries in South East Asia and China.

ResultsGroup turnover rose by 56% or $19.5 million to $54.6 million from $35.1 million in FY2000. Net profit roseby 106% to $3.3 million from $1.6 million the year before.

Earnings per share rose by 106% to 3.01 cents and net tangible asset backing per share rose by 9% to 16.64cents.

DividendsThe Directors propose a higher dividend rate this year in view of the good performance. To be approved atthe forthcoming Annual General Meeting, the gross dividend payable will be 6% per ordinary share of$0.10 each, up from 5% the previous year.

OperationsThe Group’s operations for FY2001 included the results of two subsidiaries that were acquired during theyear, namely Aqua-Terra Supply (2001) Co. Pte Ltd (“Aqua-Terra “) and KS Seafirst Marine Services Pte Ltd(“KS Seafirst”). Aqua- Terra is an established company in the oil and gas industry with strong distributionchannels in the Southeast Asian and China markets.

Reclassification of Business SegmentsDuring the year, we reclassified and presented our Group’s operations into three business segments namely,Oil & Gas, Marine and Others to better reflect our business. In previous years, the main business segmentsof the Group were oil & gas processing equipment, hydraulic, instrumentation, spares and parts and generalhardware.

02

Performance of operations(1) For FY2001, Oil & Gas was the predominant segment with a operating profit contribution

of 70% or $3.1 million to the Group’s operating profit of $4.3 million. Its turnover rose byabout 55% to $37.7 million due mainly to the contribution of the businesses from Aqua-Terra as well as additional agency lines that the Group had obtained.

(2) The Marine segment contributed about 10% to Group’s operating profit while the otherscontributed 20%. In terms of turnover growth the marine segment was the strongest withturnover rising by 240% to $5.1 million from $1.5 million the year before.

(3) The Others segment saw turnover rise by 28% to $11.9 million from $9.3 million in FY2000.There was a non-recurrent gain of about $0.57 million from the sale of our leaseholdproperty, included as other income. Excluding the amount recorded as other income, ourmargins improved due to better cost control and lowering of direct sales expenses. Theoperating profit margin before tax, interest and depreciation rose to about 7.9% comparedwith 6.8% the year before.

Performance of geographical segmentsGeographically, our sales in Singapore rose by about 68% to $24.2 million and sales to Chinarose by 20% to $21.4 million. Together these countries contributed about 84% of out totalturnover for FY2001. Sales to other regions rose strongly by about 215% to $9.0 million withthe bulk of the increase contributed by sales to Southeast Asian countries as a result of increasedoil and gas activity in these countries.

FinancialsThe Group experienced strong cash flow in 2001 and is in a strong financial position. As atend 2001, net current assets stood at $17.6 million. Shareholders’ funds have increased to$19.4 million.

Changes in Board of DirectorsOn 6 December 2001, Mr Chew Thiam Keng was appointed Managing Director of the Companyand Mr Tan Hoo Lang and Mr Tan Wei Min resigned from the Board of Directors. Mr Goh BoonChye, Chief Financial Officer was appointed as Director on 28 January 2002. On 15 April2002, Mr Billie Lee Beng Cheng and Mr Wong Meng Yeng were appointed as IndependentDirectors and members of the Audit Committee bringing the total number of independentDirectors to four. These changes are to increase the diversity and expertise of the Board to meetbusiness expansion and to comply with the new regulations on corporate governance.

AcquisitionOn 11 April 2002, KS Tech Ltd entered into a Heads of Agreement to acquire the business andstocks of the power generation unit of Scott & English Limited (“S&E “) from Kim Seng HoldingsPte Ltd (“KSH”). KSH is the majority shareholder of KS Tech Ltd. The purchase consideration isapproximately $850,000 subject to a 5% discount and adjustment from appropriate duediligence. There is no goodwill paid on the acquisition by KS Tech Ltd. KSH has concurrentlyentered into a Heads of Agreement to purchase S&E from Haw Par Corporation Ltd for aconsideration of approximately S$4.0 million subject to due diligence and a formal Sale andpurchase agreement. S&E is an established supplier of diesel generator sets in South East Asiaand China with over 50 years experience in the design, assembly and supply of its establishedbrands like “Cumford Turbo” and “Stargen” to more than 30 countries. This acquisition iscomplementary to KS Tech Ltd’s existing business and is in line with its strategy of expandingproducts and services to the oil & gas and marine industries in its markets.

Outlook for 2002The success we had in 2001 was driven not only by the Group’s expansion through acquisitionbut by our excellent execution of plans and objectives across all regions. It was a year ofhigher activity in the oil & gas and marine industries and we took steps at the outset to practicea market-driven approach of product offerings and servicing.


Strategy and directionWe will continue to follow the 3- pronged strategy outlined in my Statement last year.

(1) We intend to increase and expand distribution and products into China, Vietnam, South East Asiaand emerging markets this year as we tap into the better economic conditions in the region andChina. Vietnam and other Southeast Asian countries are likely to see a heightened level of oil andgas exploration activity and even more so, if oil prices should remain high. China, with its entryinto the WTO, will present enormous opportunities for us and will be a key, strategic market for theGroup. According to the International Energy Agency, China’s demand for oil outstripped internalsupply by 52% in 2001. In the next few years, the demand for crude oil is expected to increasefurther to fuel the targeted 7.0 % economic growth, increase in foreign direct investments and thenumerous projects to be implemented for the Olympic Games in 2008. China will be activelybuilding up its energy reserves to reduce its reliance on imports. Exploration and production activitiesare expected to increase significantly and the increased capital expenditures by the Group’scustomers such as CNOOC, PetroChina and Sinopec etc. will benefit the Group. The industry’sprospects are good.

(2) Internally, we will take steps to expand our agency lines and services and move up the supplychain to higher value-added products and services. In the markets that we operate, service isparamount and we view our customers not as mere buyers of parts and goods, but rather as strategicpartners. We partner them to find the best and cheapest solutions to their needs and with ourconstant surveillance and review of the market, we aim to be the supplier of choice in the marketsand industries we serve.

(3) The Group will continue to acquire businesses that are complementary as well as provide strategicfit and synergy to our core businesses activities.

(4) Focusing on cost control, productivity and management efficiency, it is our commitment to continueto reduce non-strategic costs and improve our processes in order to improve the overall operatingefficiency. Aqua-Terra has commenced and will be implementing the JDE’s enterprise resourceplanning system by the third quarter of 2002.

We have laid the foundation of a solid business strategy and I am confident that we have the ability toexecute our plan for growth in 2002 and into the future, barring unforeseen circumstances.

AcknowledgementsI want to thank all our employees who have worked exceptionally hard to make sure that our customersget the outstanding service that they expect. I would also like to thank our customers for their supportand continued patronage and our shareholders for your understanding and patience with managementas we embark on and execute our long-term plan for success.

I also wish to extend my appreciation to my fellow directors, suppliers, business associates and bankersfor their invaluable support during the year.

Tan Kim SengExecutive Chairman

CHAIRMAN’S STATEMENT

04

CORPORATE INFORMATION

Board of DirectorsTan Kim Seng

(Executive Chairman)Tan Fuh GihTan Hoo Lang

(resigned and appointed alternate director toTan Kim Seng on 28 January 2002)

Tan Wei Min(resigned and appointed alternate director toTan Fuh Gih on 28 January 2002)

Chew Heng ChingSitoh Yih PinChew Thiam Keng

(appointed on 5 December 2001)Goh Boon Chye

(appointed on 28 January 2002)Lee Beng Cheng, Billy

(appointed on 15 April 2002)Wong Meng Yeng

(appointed on 15 April 2002)

Audit CommitteeChew Heng Ching (Chairman)Tan Kim SengSitoh Yih PinLee Beng Cheng, Billy

(appointed on 15 April 2002)Wong Meng Yeng

(appointed on 15 April 2002)

Company SecretariesFoo Soon SooLim Ka Bee

Registered OfficeNo. 4 Tuas Avenue 5, Jurong,Singapore 639331

Registrar andshare transfer officeBarbinder & Co Pte Ltd8 Cross Street, #11-00 PWC Building,Singapore 048424

Auditors andreporting accountantsPricewaterhouseCoopersCertified Public Accountants8 Cross Street, #17-00 PWC Building,Singapore 048424Partner in charge: Lim Seow Chiang

Principal bankersThe Development Bank of Singapore Limited6 Shenton Way, DBS Building Tower OneSingapore 068809

Oversea-Chinese Banking Corporation Limited65 Chulia Street, OCBC Centre,Singapore 049513

Overseas Union Bank Limited1 Raffles Place, OUB Centre,Singapore 048616

SIGNIFICANT EVENTSFOR 2001/2002

May 2001Appointed regional distributor for Alfa Laval stainless steeltubings, sanitary & tri-clover pharmaceutical products on1 May 2001

June 2001Completed the physical move and consolidation of KS TechLtd and its subsidiaries’ operations to No. 4 Tuas Ave 5, forbetter operating efficiency and management

July 2001Acquired the business assets of Seafirst Maritime Pte Ltd. Awholly owned subsidiary, KS Seafirst Marine Services CoPte Ltd was incorporated and commenced operation

Sept 2001Appointed by National Oilwell, U.S.A. as exclusiveIntegrated Procurement Service (IPS) provider for their oilrigs project in Singapore

Dec 2001Appointment of Chew Thiam Keng as Managing Directorof the Company

Jan 2002Aqua-Terra Supply (2001) Co. Pte Ltd, a wholly ownedsubsidiary was appointed as the regional exclusive distributorfor Gates swaging Rotary hoses in Asia Pacific

Feb 2002Set up a representative office in Dili , East Timor to service oil& gas companies

Mar 2002Received approval for transfer from SGX-SESDAQ to SGXMainboard with effect from 11 March 2002

Apr 2002Enter into Heads of Agreement to acquire the power generationbusiness and related assets of Scott & English Ltd. Appointmentof Mr Lee Beng Cheng, Billy and Mr Wong Meng Yeng asindependent directors and increasing the Audit Committee tofour members


6

For the year 2001 2000 Increase/Decrease$’ 000 $’ 000 %

Turnover 54,600 35,081 56%Profit before tax 4,076 2,334 75%Profit after tax 3,253 1,581 106%

At year endShareholders’ fund 19,405 16,560 17%Total assets 43,439 28,374 53%Total liabilities 24,033 11,814 103%

Per shareEarnings (cents) 3.01 1.46 106%Net tangible assets (cents) 16.64 15.3 9%

Financial performanceCurrent ratio (times) 1.80 2.18 -17%Gearing ratio (times) 0.37 0.24 54%

Financial HighlightsKS TECH Ltd and its subsidiaries

0

10

20

30

40

50

60

96 97 98 99 00 01

28.1 29.7 30.626.8

35.1

54.6

Singapore44.3%

PRC39.2%

Other Regions16.5%

0

1

2

3

4

5

96 97 98 99 00 01

2.7

3.8

2.7

4.0

2.3

4.1

Oil & Gas69.0%

Marine9.3%

Others21.7%

Turnover by business segments Turnover by geographical locations

Turnover (S$million) Profit before tax (S$million)


Statement of Corporate Governance

KS Tech Ltd is committed to a high standard of corporate governance in order to protect the interests of its shareholders. The Boardof Directors fully supports the Best Practices Guide on corporate governance as issued by the Singapore Exchange Trading Limited(“SGX”) .

Board of DirectorsThe Board of Directors consists of members who have a diversity of experience and expertise. The board comprises eight members,including four independent directors, two of whom were appointed on 15 April 2002. The Board meets regularly and supervises themanagement of the business and affairs of the company. For the year ended 31 December 2001, it held three meetings.

Apart from its statutory responsibilities, the board reviews and approves the group’s strategic directions, action plans, key operationalinitiatives, major investments and funding decisions; identifies principal risks of the group’s business and ensures the implementationof appropriate systems to manage these risk; reviews the internal controls and measures financial performance of the group .

Audit CommitteeThe directors of KS Tech Ltd have adopted the principles of corporate governance under the Best Practices Guide as formulated bySGX with respect to audit committees.

The audit committee comprises the following five members, four of whom, including its chairman, are independent directors:

Mr. Chew Heng Ching (Chairman)Mr. Sitoh Yih PinMr. Tan Kim SengMr. Billy Lee (appointed on 15 April 2002)Mr. Wong Meng Yeng (appointed on 15 April 2002)

For the financial year ended 31 December 2001, the audit committee held four meetings and performed the following functions:-

1. reviewed with the external auditors, their audit plan, evaluation of the internal accounting controls, audit report and any matterswhich the external auditors wishes to discuss;

2. reviewed the half-yearly and annual financial statements, including announcements to shareholders and SGX prior to submissionto the board;

3. reviewed the con-operation given by the company’s officers to the external auditors;4. made recommendations to the board on the appointment of the external auditors; and5. reviewed interested party transactions.

The audit committee has full access to the external auditors. The committee also received co-operation from management and wasnot obstructed or impeded by management in carrying out its functions during the year. Throughout the year there was no instanceof any suspected misdeed or irregularity, which was likely to have a material impact on the group’s operating results and financialposition.

The audit committee recommends the re-appointment of PricewaterhouseCoopers as the company’s auditors for the current financialyear.

8

Remuneration Committee and Nomination CommitteeThe Board of Directors is currently looking into the formation of remuneration committee and nomination committee.

The role of the remuneration committee is to review and approve the remuneration package and terms of employment of the company’sDirectors and key executives.

In Line with SGX Best Practices Guide on Securities TransactionsDealing in securities the company has devised and adopted on internal compliance code to provide guidance to its Directors and keyemployees on their dealings in its securities.

The Company issues circulars to its Directors and key employees who have access to unpublished material price-sensitive informationto remind them that they are required to request on their dealings in shares of the Company. The Directors and key employees arealso reminded of the prohibition in dealings in shares of the company the month before the release of the half-year and year-endfinancial results and ending on the date of the announcement of the relevant results.

Chew Heng Ching Tan Kim SengDirector Director

Statement of Corporate Governance


Directors’ Reportfor the financial year ended 31 December 2001

The directors present their report to the members together with the audited financial statements of the Company and of the Group forthe financial year ended 31 December 2001.

Directors

The directors of the Company at the date of this report are:

Tan Kim SengTan Fuh GihTan Hoo Lang (resigned and appointed alternate director to Tan Kim Seng on 28 January 2002)Tan Wei Min (resigned and appointed alternate director to Tan Fuh Gih on 28 January 2002)Chew Heng ChingSitoh Yih PinChew Thiam Keng (appointed on 5 December 2001)Goh Boon Chye (appointed on 28 January 2002)Lee Beng Cheng, Billy (appointed on 15 April 2002)Wong Meng Yeng (appointed on 15 April 2002)

Principal activities

The principal activities of the Company are those of trading in hydraulic products, instrumentation and equipment for the shipbuilding,marine and oil and gas industries. The principal activities of its subsidiaries are set out in Note 18 to the financial statements.

During the financial year, the wholly-owned subsidiary, Kim Seng Hardware & Oilfield Supply Pte Ltd transferred its business togetherwith the related assets and liabilities to the Company in order to streamline the activities of the Group. The transfer took effect on 1January 2001. Subsequent to the transfer, the principal activities of the Company also include those of commission agents andtrading in hardware products and oilfield equipment.

There have been no other significant changes in the nature of these activities during the financial year.

Results for the financial year

The consolidated profit after tax attributable to the members of the Company for the financial year was $3,252,711. The Companymade a profit after tax for the financial year of $2,878,128.

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Directors’ Reportfor the financial year ended 31 december 2001

Material transfers to or from reserves and provisions

Details of movements in reserves are disclosed in the statements of changes in equity.

Apart from the above, there were no material transfers to or from reserves and provisions except for normal amounts set aside forsuch items as depreciation, provisions for doubtful debts, provision for slow-moving inventories, provision for diminution in value ofinvestments and income tax as disclosed in the financial statements.

Acquisition and disposal of subsidiaries

During the financial year, the Company incorporated the following subsidiaries:Issued

share capital on EquityName of subsidiary incorporation held

$ %

Aqua Terra Supply (2001) Co. Pte Ltd 2 100KS Seafirst Marine Services Pte Ltd 2 100

During the financial year, the Company purchased the businesses and assets of Aqua Terra Supply Company Private Limited andSeafirst Maritime Pte Ltd. The businesses and assets were injected into the above subsidiaries. Further information is disclosed inthe notes to the consolidated cash flow statement.

There were no other acquisitions or disposals of interests in subsidiaries during the financial year.

Issue of shares and debentures

There were no changes in the issued share capital of the Company during the financial year.

The following changes in the issued share capital of the Company's subsidiaries took place during the financial year:

Issued at par forIssued at par cash during thefor cash on financial year for

Ordinary shares of S$1 each incorporation working capital purposes

Number Nominal Number Nominalof shares value of shares value

$ $

Aqua Terra Supply (2001) Co. Pte Ltd 2 2 1,999,998 1,999,998KS Seafirst Marine Services Pte Ltd 2 2 199,998 199,998

The Company and its subsidiaries did not issue any debentures.



Arrangements to enable directors to acquire shares or debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was toenable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company orany other body corporate.

Directors' interests in shares or debentures

(a) According to the register of directors' shareholdings, none of the directors holding office at the end of the financial year hadany interest in the share capital of the Company and related companies, except as follows:

Holdings registered in Holdings in which a directorname of director or nominee is deemed to have an interest

At 31.12.2001 At 1.1.2001 At 31.12.2001 At 1.1.2001Ordinary shares of $0.10 each

in the Company

Tan Kim Seng — — 66,800,000 91,800,000Tan Fuh Gih — — 66,800,000 91,800,000Tan Hoo Lang — — 66,800,000 91,800,000Tan Wei Min — — 66,800,000 91,800,000Chew Heng Ching 100,000 100,000 — —Sitoh Yih Pin 100,000 100,000 — —

Ordinary shares of $1 eachin the holding company,Kim Seng Holdings Pte Ltd

Tan Kim Seng 373,123 373,123 — —Tan Fuh Gih 342,029 342,029 — —Tan Hoo Lang 342,029 342,029 — —Tan Wei Min 310,935 310,935 — —

(b) Mr Tan Kim Seng, Mr Tan Fuh Gih, Mr Tan Hoo Lang and Mr Tan Wei Min, who by virtue of their deemed interest of not lessthan 20% of the issued shares of the holding company and the Company are deemed to have interest in all the shares of thewholly owned subsidiaries of the holding company and the Company.

(c) None of the directors holding office at 31 December 2001 had any interest in the shares in, or debentures of any other relatedcompanies.

12


Dividends

Dividends paid, declared and proposed since the end of the Company's preceding financial year are as follows:$

A final dividend of 5% less tax at 24.5% was paid on 15 June 2001 in respect of the financial yearended 31 December 2000 as proposed in the Directors' Report for that financial year 407,700

Bad and doubtful debts

Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain the action taken inrelation to the writing off of bad debts and providing for doubtful debts of the Company. The directors have satisfied themselves thatall known bad debts of the Company have been written off and that adequate provision has been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would render any amounts written off for bad debtsor provided for doubtful debts in the Group inadequate to any substantial extent.

Current assets

Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain that current assetsof the Company which were unlikely to realise their book values in the ordinary course of business have been written down to theirestimated realisable value or that adequate provisions have been made for the diminution in value of such current assets.

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report, which would renderthe values attributed to current assets in the consolidated financial statements misleading.

Charges on assets and contingent liabilities

At the date of this report, no charges have arisen since the end of the financial year on the assets of the Company or its subsidiarieswhich secure the liability of any other person, nor has any contingent liability arisen since the end of the financial year in theCompany or its subsidiaries.

Ability to meet obligations

No contingent or other liability of the Company or its subsidiaries has become enforceable or is likely to become enforceable withinthe period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect theability of the Company and its subsidiaries to meet their obligations as and when they fall due.



Other circumstances affecting the financial statements

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the consolidatedfinancial statements which would render any amount stated in the financial statements of the Company and the consolidated financialstatements of the Group misleading.

Unusual items

In the opinion of the directors, the results of the operations of the Company and of the Group during the financial year have not beensubstantially affected by any item, transaction or event of a material and unusual nature.

Unusual items after the financial year

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between theend of the financial year and the date of this report which would affect substantially the results of the operations of the Company andof the Group for the financial year in which this report is made.

Directors' contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than as disclosedin the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm ofwhich he is a member or with a company in which he has a substantial financial interest.

Share options

There were no options granted during the financial year to subscribe for unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company.

There were no unissued shares of the Company under option at the end of the financial year.

Audit Committee

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, including areview of the financial statements of the Company and of the Group for the financial year and the auditors' report thereon. The natureand extent of the functions performed by the Audit Committee are further described in the Annual Report under the heading "CorporateGovernance".

The Audit Committee has nominated PricewaterhouseCoopers for re-appointment as auditors of the Company at the forthcomingAnnual General Meeting.

14

Auditors

The auditors, PricewaterhouseCoopers have expressed their willingness to accept re-appointment.

On behalf of the directors

TAN KIM SENG CHEW THIAM KENGDirector Director25 April 2002



Statement by Directors

In the opinion of the directors, the financial statements set out on pages 17 to 47 are drawn up so as to give a true and fair view of thestate of affairs of the Company and of the Group at 31 December 2001 and of the results of the business, and changes in equity, ofthe Company and of the Group and the cash flows of the Group for the financial year then ended, and at the date of this statementthere are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the directors

TAN KIM SENG CHEW THIAM KENGDirector Director25 April 2002

16

Auditors' Reportto the members of KS TECH LTD

We have audited the financial statements of KS Tech Ltd and the consolidated financial statements of the Group for the financial yearended 31 December 2001 set out on pages 17 to 47. These financial statements are the responsibility of the Company's directors.Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform ouraudit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by the directors, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the accompanying financial statements of the Company and consolidated financial statements of the Group are properlydrawn up in accordance with the provisions of the Singapore Companies Act ("Act") and Singapore Statements of AccountingStandard and so as to give a true and fair view of:

(i) the state of affairs of the Company and of the Group at 31 December 2001, the results and changes in equity of theCompany and of the Group and the cash flows of the Group for the financial year ended on that date; and

(ii) the other matters required by section 201 of the Act to be dealt with in the financial statements of the Company andthe consolidated financial statements of the Group; and

(b) the accounting and other records, and the registers required by the Act to be kept by the Company and its subsidiaries havebeen properly kept in accordance with the provisions of the Act.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of theCompany are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statementsand we have received satisfactory information and explanations as required by us for those purposes.

The auditors' reports on the financial statements of the subsidiaries were not subject to any qualification and did not include anycomment made under section 207(3) of the Act.

PricewaterhouseCoopersCertified Public Accountants

Singapore,25 April 2002


Income Statementsfor the financial year ended 31 december 2001

The Group The Company

2001 2000 2001 2000Notes $ $ $ $

Revenue 3 54,599,671 35,080,940 43,060,057 12,526,516

Cost of sales ( 40,120,929 ) ( 26,286,740 ) ( 31,947,473 ) ( 7,424,940 )

Gross profit 14,478,742 8,794,200 11,112,584 5,101,576

Other operating income 855,383 403,966 731,539 —

Distribution costs ( 6,590,567 ) ( 4,571,552 ) ( 5,265,022 ) ( 2,127,910 )

Administrative expenses ( 2,452,091 ) ( 1,852,453 ) ( 1,644,447 ) ( 992,207 )

Other operating expenses ( 1,924,973 ) ( 461,993 ) ( 1,151,562 ) ( 220,925 )

Operating profit 4 4,366,494 2,312,168 3,783,092 1,760,534

Finance income 5 103,224 130,615 171,460 16,130

Finance costs 6 ( 394,184 ) ( 108,458 ) ( 335,424 ) ( 3,436 )

Profit before tax 4,075,534 2,334,325 3,619,128 1,773,228

Tax 8 ( 822,823 ) ( 753,372 ) ( 741,000 ) ( 580,122 )

Net profit 3,252,711 1,580,953 2,878,128 1,193,106

Earnings per ordinary share (cents) 9 3.01 1.46

The accompanying notes form an integral part of these financial statements. Auditors’ Report - Page 16.

18


2001 2000 2001 2000Notes $ $ $ $

Current assetsInventories 10 14,948,766 8,261,454 10,580,281 7,997,925Short term investments 11 190,294 206,894 15,422 22,498Trade debtors 12 17,966,559 10,853,122 13,072,524 3,534,974Other debtors, deposits and prepayments 13 1,188,945 546,225 1,153,440 108,633Due by subsidiaries 14 — — 4,613,676 32,608Due by related company - non-trade 15 151,621 — 151,621 —Fixed deposits with financial institutions 16 3,295,100 4,364,957 1,740,281 279,477Cash and bank balances 16 1,794,713 703,956 1,022,835 337,928

39,535,998 24,936,608 32,350,080 12,314,043

Non-current assetsFixed assets 17 2,392,585 3,357,442 1,810,779 2,873,988Subsidiaries 18 — — 5,263,941 3,063,941Investments 19 80,000 80,000 80,000 —Goodwill 20 1,429,984 — — —

3,902,569 3,437,442 7,154,720 5,937,929

Total assets 43,438,567 28,374,050 39,504,800 18,251,972

Current liabilitiesTrade creditors and accrued

operating expenses 15,661,014 6,794,204 11,845,810 2,367,344Trust receipts 3,688,110 1,705,671 3,688,110 —Due to holding company - non-trade 21 — 3,271 — —Due to subsidiary - non-trade 14 — — 2,063,313 —Bank overdrafts 16 58,383 1,989,807 — 157,378Hire purchase creditors 22 126,316 77,261 126,316 29,834Provision for taxation 8 1,038,992 883,042 925,739 593,148Current portion of long term bank loan 23 1,333,332 — 1,333,332 —

21,906,147 11,453,256 19,982,620 3,147,704

Balance Sheetsas at 31 december 2001




2001 2000 2001 2000Notes $ $ $ $

Non-current liabilitiesHire purchase creditors 22 383,672 238,729 383,672 43,857Long term bank loan 23 1,666,669 — 1,666,669 —Deferred taxation 8 77,003 122,000 63,000 122,000

2,127,344 360,729 2,113,341 165,857

Total liabilities 24,033,491 11,813,985 22,095,961 3,313,561

Net assets 19,405,076 16,560,065 17,408,839 14,938,411

Share capital and reservesShare capital 25 10,800,000 10,800,000 10,800,000 10,800,000Share premium 25 1,553,427 1,553,427 1,553,427 1,553,427Reserves 26 7,051,649 4,206,638 5,055,412 2,584,984

19,405,076 16,560,065 17,408,839 14,938,411

Balance Sheetsas at 31 december 2001


20

Consolidated Statement of Changes In Equityfor the financial year ended 31 december 2001

AssetShare Share revaluation Retained

Note capital premium reserve earnings Total

$ $ $ $ $

Balance at 1 January 2001- as previously reported 10,800,000 1,553,427 128,000 3,670,938 16,152,365- prior year adjustment 2(a) — — — 407,700 407,700

- as restated 10,800,000 1,553,427 128,000 4,078,638 16,560,065

Total recognised gains for thefinancial year - Net profit forthe financial year — — — 3,252,711 3,252,711

Transfer on disposal ofleasehold building — — ( 128,000 ) 128,000 —

Dividend paid for 2000 27 — — — ( 407,700 ) ( 407,700 )

Balance at 31 December 2001 10,800,000 1,553,427 — 7,051,649 19,405,076


- as restated 10,800,000 1,553,427 128,000 2,899,985 15,381,412



Balance at 31 December 2000 10,800,000 1,553,427 128,000 4,078,638 16,560,065



Statements of Changes In Equity - Companyfor the financial year ended 31 december 2001

AssetShare Share revaluation Retained

Note capital premium reserve earnings Total

$ $ $ $ $


- as restated 10,800,000 1,553,427 128,000 2,456,984 14,938,411


Transfer on disposal of leaseholdbuilding — — ( 128,000 ) 128,000 —-


Balance at 31 December 2001 10,800,000 1,553,427 — 5,055,412 17,408,839


- as restated 10,800,000 1,553,427 128,000 1,666,178 14,147,605

Total recognised gains for thefinancial year - Net profit for thefinancial year — — — 1,193,106 1,193,106


Balance at 31 December 2000 10,800,000 1,553,427 128,000 2,456,984 14,938,411


22

Consolidated Cash Flow Statementfor the financial year ended 31 december 2001


2001 2000Note $ $

Cash flows from operating activitiesProfit before tax 4,075,534 2,334,325Adjustments for:

Amortisation of goodwill 250,016 —Depreciation 610,495 453,300Interest income ( 99,405 ) ( 126,721 )Interest expense 394,184 108,458Gain on disposal of fixed assets ( 615,671) ( 43,886 )Fixed assets written-off 91,255 862Gain on disposal of short-term investments ( 12,386 ) —Provision for diminution in short term investments 7,076 12,111Write-back of provision for diminution in value of short term investments ( 8,083 ) —Dividend income ( 3,819 ) ( 3,894 )

Operating cash flow before working capital change 4,689,196 2,734,555

Change in operating assets and liabilitiesInventories ( 2,821,245 ) ( 1,920,696 )Trade debtors ( 7,113,437 ) ( 2,098,015 )Other debtors, deposits and prepayments ( 642,720 ) (402,211)Trade creditors and accrued operating expenses 8,852,262 2,173,741Due to holding company ( 3,271 ) 3,271Due from related company ( 151,621 ) —

Cash generated from operations 2,809,164 490,645

Income tax paid ( 711,870 ) ( 979,083 )

Net cash inflow/(outflow) from operating activities 2,097,294 ( 488,438 )

Cash flows from investing activitiesPayments for purchase of fixed assets ( 879,410 ) ( 218,887 )Proceeds from sale of short term investments 29,993 —Dividend income 3,819 3,894Interest income 99,405 126,721Proceeds from disposal of fixed assets 2,812,516 112,754Payments for purchase of business assets of subsidiaries ( 6,207,165 ) —

Net cash (outflow)/inflow from investing activities ( 4,140,842 ) 24,482


Consolidated Cash Flow Statementfor the financial year ended 31 december 2001


2001 2000Note $ $

Cash flows from financing activitiesTrust receipts 1,982,439 ( 1,352,135 )Payments to hire purchase creditors ( 199,232 ) ( 38,766 )Term loan proceeds 4,000,000 —Repayment of term loan ( 999,999 ) —Dividend paid ( 407,700 ) ( 402,300 )Interest paid ( 379,636 ) ( 108,458 )

Net cash inflow/(outflow) from financing activities 3,995,872 ( 1,901,659 )

Net increase/(decrease) in cash and cash equivalents held 1,952,324 ( 2,365,615 )Cash and cash equivalents at the beginning of the financial year 3,079,106 5,444,721

Cash and cash equivalents at the end of the financial year 16 5,031,430 3,079,106

24

Notes to the Consolidated Cash Flow Statementfor the financial year ended 31 december 2001


Acquisition of assets

During the financial year, the Company purchased the businesses and assets of Aqua Terra Supply Company Private Limited andSeafirst Maritime Pte Ltd. The Company subsequently incorporated 2 subsidiaries, Aqua Terra Supply (2001) Co. Pte Ltd and KSSeafirst Marine Services Pte Ltd to take over the businesses and assets acquired.

Details of the acquisition are as follows:

$

Fair values of assets acquiredFixed assets 661,098Inventories 3,866,067

4,527,165Total consideration paid in cash 6,207,165

Goodwill (Note 20) 1,680,000


Notes to the Financial Statementsfor the financial year ended 31 december 2001

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. General

The Company is incorporated and domiciled in Singapore and is listed on the Singapore Exchange. The address of itsregistered office is:

No. 4 Tuas Avenue 5Singapore 639331

The principal activities of the Company are those of trading in hydraulic products, instrumentation and equipment for theshipbuilding, marine and oil and gas industries. The principal activities of its subsidiaries are set out in note 18 to the financialstatements.

During the financial year, the wholly-owned subsidiary, Kim Seng Hardware & Oilfield Supply Pte Ltd transferred its businesstogether with the related assets and liabilities to the Company in order to streamline the activities of the Group. The transfertook effect on 1 January 2001. Subsequent to the transfer, the principal activities of the Company also include those ofcommission agents and trading in hardware products and oilfield equipment.

2. Significant accounting policies

(a) Basis of preparation

The financial statements are prepared in accordance with the historical cost convention, modified to include leaseholdbuilding at valuation. The financial statements are prepared in accordance with and comply with Singapore Statementsof Accounting Standard. The financial statements are expressed in Singapore dollars.

In 2001, the Group adopted the following standards:

SAS 8 (Revised 2000) Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting PoliciesSAS 10 (Revised 2000) Events Occurring after the Balance Sheet DateSAS 17 (Revised 2000) Employee BenefitsSAS 22 (Revised 2000) Business CombinationsSAS 31 Provisions, Contingent Liabilities and Contingent AssetsSAS 32 Financial Instruments - Disclosure and PresentationSAS 34 Intangible AssetsSAS 36 Impairment of Assets

Prior to the adoption of SAS 10 and SAS 31, the Group recognised final dividends declared after the balance sheetdate as a liability at the balance sheet date. In accordance with SAS 10, the change in the accounting treatment forthe proposed dividends for the previous financial years have been adjusted as a prior year adjustment to the openingbalance of retained earnings for the earliest period presented and the comparative information has been restated.Further information is disclosed in note 27.

26


2. Significant accounting policies (continued)

(a) Basis of preparation (continued)

There are no changes in accounting policy that affect operating profit resulting from the adoption of the revised ornew standards in these financial statements, as the Group was already following the recognition and measurementprinciples in those standards.

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made upto the end of the financial year. The results of subsidiaries acquired or disposed of during the financial year areincluded in or excluded from the consolidated income statement from the date of their acquisition or disposal.

All intercompany balances and significant intercompany transactions are eliminated in full on consolidation.

(c) Foreign currencies

Transactions in foreign currencies during the financial year are converted to Singapore dollars at the rates of exchangeprevailing on the transaction dates. Foreign currency monetary assets and liabilities are translated into Singaporedollars at the rates of exchange prevailing at the balance sheet date. Exchange differences are taken to the incomestatements.

(d) Revenue recognition

Revenue from the sale of goods is recognised upon delivery to customers, net of goods and services tax and salesreturns.

Commission income is recognised when the services have been rendered and that it is probable that the economicbenefits associated with the transaction will flow to the company.

Revenue from the rendering of agency services is recognised when the service is provided.

Dividend income is recorded gross in the income statements in the accounting period in which a dividend is declaredby the investee company.

Interest income is accrued on a day to day basis.

(e) Taxation

Tax expense is determined on the basis of tax effect accounting using the liability method. Deferred taxation isprovided on significant timing differences arising from the different treatments in accounting and taxation of relevantitems.




(e) Taxation (continued)

In accounting for timing differences, deferred tax assets are not recognised unless there is a reasonable expectationof their realisation.

(f) Inventories

Inventories comprising finished goods held for resale, are stated at the lower of cost and net realisable value. Cost isdetermined on a weighted average basis. Provision is made, where necessary, for obsolete, slow-moving and defectiveinventories.

(g) Investments

Quoted and unquoted investments, including the investment in subsidiaries that are intended to be held for the longterm are stated at cost less provision. This provision is made in recognition of a diminution in the value of investmentswhich is other than temporary.

Short term quoted investments are stated at the lower of cost and market value determined on an individual investmentbasis. Cost is determined on the weighted average method. Profits or losses on disposals of investments are takento the income statements.

(h) Trade debtors

Trade debtors are carried at original invoice amount less an estimate made for doubtful receivables based on areview of all outstanding amounts at year end. Bad debts are written off when identified.

(i) Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cashflow statement,cash and cash equivalents comprise fixed deposits with financial institutions, cash and bank balances and bankoverdrafts.

(j) Fixed assets and depreciation

Fixed assets other than the leasehold building are stated at cost less accumulated depreciation.

The leasehold building is stated at revalued amount less accumulated depreciation. The valuation of the leaseholdbuilding is carried out once in every three years. The leasehold building was disposed during the financial year. Thesurplus arising on the revaluation of the leasehold building was transferred directly to retained profits.

When the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediatelyto its recoverable amount.

28



(j) Fixed assets and depreciation (continued)

Depreciation is calculated on a straight line basis to write off the cost or revalued amount of fixed assets over theirexpected useful lives. The estimated useful lives are as follows:

Leasehold building 60 yearsPlant and machinery 5 - 7 yearsMotor vehicles 5 - 7 yearsOffice equipment 3 - 5 yearsRenovation, furniture and fittings 5 - 10 years

(k) Goodwill

Goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable assetswhen acquired. Goodwill is amortised on a straight-line basis, through the consolidated income statement, over itsuseful economic life of 5 financial years. Goodwill which is assessed as having no continuing economic value iswritten off to the income statement.

(l) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events,it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of theamount of the obligation can be made.

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for theestimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.

(m) Accounting for leases

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially allthe risks and benefits incidental to the ownership of the leased assets, and operating leases under which the lessoreffectively retains substantially all such risks and benefits. Assets acquired under hire purchase agreements aretreated as finance leases.

Finance leases are capitalised at the estimated present value of the underlying lease payments. Each lease paymentis allocated between the liability and finance charges so as to achieve a constant rate of return on the financebalance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-termpayables. The interest element of the finance charge is charged to the income statement over the lease period. Fixedassets acquired under finance leasing contracts are depreciated in accordance with the depreciation policy set out inNote 2(j).




(m) Accounting for leases (continued)

Operating lease payments are charged to the income statement on a straight line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to thelessor by way of penalty is recognised as an expense in the period in which termination takes place.

(n) Financial risk management

Financial risk factors

The Group's activities expose it to a variety of financial risks, including the effects of changes in foreign currencyexchange rates and interest rates. The Group's overall risk management programme focuses on the unpredictabilityof financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.

Risk management is carried out by the finance department under policies approved by the Board of Directors. Thefinance department identifies, evaluates and hedges financial risks in close co-operation with the operating units.The Board provides written principles for overall risk management, as well as written policies covering specific areas,such as foreign exchange risk, interest rate risk, credit risk, and investing excess liquidity.

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currencyexposures primarily with respect to United States dollars. Companies in the Group buy and sell in the samecurrency that is, United States dollars, for all major contracts to hedge their exposure to foreign currency riskin the local reporting currency.

(ii) Interest rate risk

The Group's income and operating cash flows are substantially independent of changes in market interestrates. The Group has no significant interest rate risk as it has sufficient funds to meet the carrying amount ofthe Group's financial liabilities. The Group places its surplus funds with reputable banks.

(iii) Credit risk

The Group has no significant concentrations of credit risk. The Group has policies in place to ensure thatsales of products and services are made to customers with an appropriate credit history.

(iv) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availabilityof funding through an adequate amount of committed credit facilities and the ability to close out marketpositions. Due to the dynamic nature of the underlying businesses, the Group aims at maintaining flexibility infunding by keeping committed credit lines available.

30


3. RevenueThe Group The Company

2001 2000 2001 2000$ $ $ $

Sale of goods 52,758,228 34,119,798 41,444,068 12,526,516Commission income 1,615,989 961,142 1,615,989 —Shipping agency fees 225,454 — — —

54,599,671 35,080,940 43,060,057 12,526,516

4. Operating profitThe Group The Company

2001 2000 2001 2000$ $ $ $

Operating profit is arrived at after:

Charging:Auditors' remuneration

- Current year 105,000 90,000 75,000 60,000- Underprovision in previous year — 34,000 — 32,000

Fees for non-audit services byauditors of the Company 37,437 30,700 26,823 24,200

Amortisation of goodwill 250,016 — — —Bad trade debts written-off 3,884 — 179 —Depreciation on fixed assets

- Leasehold building 28,395 42,593 28,395 42,593- Plant and machinery 100,893 164,529 93,343 164,235- Motor vehicles 216,102 130,034 187,150 26,161- Office equipment 183,096 76,598 99,601 26,486- Renovation, furniture and fittings 82,009 39,546 74,011 31,308

Directors' fees 50,000 50,000 50,000 50,000Directors' remuneration 664,914 622,414 664,914 299,476Fixed assets written-off 91,255 862 74,300 —Net foreign exchange losses — — — 18,147Provision for doubtful trade debts 120,796 83,847 74,688 —Provision for diminution in value

of short term investments 7,076 17,791 7,076 9,010Provision for slow moving inventories 225,000 250,000 225,000 50,000Rental expense - operating leases 846,462 209,468 609,434 105,594



4. Operating profit (continued)The Group The Company

2001 2000 2001 2000$ $ $ $

And crediting:Bad trade debts recovered 4,450 17,026 182 1,261Gain on disposal of fixed assets 615,671 43,886 615,074 6,116Gain on disposal of quoted

short-term equity investments 12,386 — — —Net foreign exchange gain 83,274 166,006 40,994 —Write-back of provision for diminution

in value of short term investments 8,083 5,680 — —

Remuneration bands of directors of the Company

The number of directors of the Company in remuneration band:2001 2000

Below $250,000 7 6

5. Finance incomeThe Group The Company

2001 2000 2001 2000$ $ $ $

Interest income- Fixed deposits 96,979 125,537 12,051 16,130- Cash at bank 2,426 1,184 447 —- Advances to a subsidiary — — 158,620 —

Dividend income- Quoted equity shares 3,819 3,894 342 —

103,224 130,615 171,460 16,130

32


6. Finance costsThe Group The Company

2001 2000 2001 2000$ $ $ $

Interest expense- Bank overdrafts 138,847 33,572 80,087 1,292- Hire purchase 12,598 5,671 12,598 1,961- Trust receipts 133,525 69,215 133,525 183- Term loan 109,214 — 109,214 —

394,184 108,458 335,424 3,436

7. Staff costsThe Group The Company

2001 2000 2001 2000$ $ $ $

Wages and salaries 4,562,522 2,876,011 3,286,865 1,600,163Employer's contribution to Central

Provident Fund 713,356 333,082 534,919 195,155

5,275,878 3,209,093 3,821,784 1,795,318

Number of persons employed at the end of the financial year:


2001 2000 2001 2000

Full time 160 112 111 61



8. Tax

(a) Tax expenseThe Group The Company

2001 2000 2001 2000$ $ $ $

Income tax expense attributableto profit is made up of:

Current income tax 867,820 709,250 800,000 483,000Deferred tax ( 33,997 ) ( 47,000 ) ( 48,000 ) 6,000

833,823 662,250 752,000 489,000Underprovision of tax in prior

financial years — 80,122 — 80,122(Over)/Underprovision of deferred

tax in prior financial years ( 11,000 ) 11,000 ( 11,000 ) 11,000

822,823 753,372 741,000 580,122

The income tax expense on the results of the Company and of the Group for the financial year is lower than theamount of income tax determined by applying the Singapore standard rate of income tax to profit before taxation dueto certain income not being subject to tax and the Singapore statutory stepped income exemption and one-off taxrebate of 5% on the income tax payable, applicable for the year of assessment 2002.

(b) Movements in provision for current tax


2001 2000 2001 2000$ $ $ $

Balance at the beginning of thefinancial year 883,042 1,072,753 593,148 686,373

Income tax paid ( 711,870 ) ( 979,083 ) ( 467,409 ) ( 656,347 )Current financial year's income tax

provision 867,820 709,250 800,000 483,000Underprovision in prior financial years — 80,122 — 80,122Balance at the end of the

financial year 1,038,992 883,042 925,739 593,148

34


8. Tax (continued)

(c) Composition of deferred tax

Provision for deferred tax comprises the estimated tax expense at current tax rates on the following items:


2001 2000 2001 2000$ $ $ $

Difference in depreciation andamortisation of fixed assets foraccounting and income taxpurposes 161,003 128,240 147,000 128,240

Expenditure currently notdeductible for tax ( 84,000 ) ( 6,240 ) ( 84,000 ) ( 6,240 )

77,003 122,000 63,000 122,000

(d) Movements in provision for deferred taxThe Group The Company

2001 2000 2001 2000$ $ $ $

Balance at the beginning of thefinancial year 122,000 158,000 122,000 105,000

Transfer (to)/from incomestatement ( 44,997 ) ( 36,000 ) ( 59,000 ) 17,000

Balance at the end of thefinancial year 77,003 122,000 63,000 122,000

9. Earnings per ordinary shareThe Group

2001 2000$ $

Profit after tax attributable to members of KS Tech Ltd 3,252,711 1,580,953Weighted average number of ordinary shares in issue

for calculation of earnings per share 108,000,000 108,000,000



9. Earnings per ordinary share (continued)

Earnings per share is calculated by dividing the profit after tax attributable to shareholders by the weighted average numberof ordinary shares in issue during the financial year.

Fully diluted earnings per share has not been presented as there is no dilution.

10. InventoriesThe Group The Company

2001 2000 2001 2000$ $ $ $

Finished goods held for resale, at cost 15,423,766 8,511,454 10,855,281 8,047,925Less: Provision for inventories ( 475,000 ) ( 250,000 ) ( 275,000 ) ( 50,000 )

Total inventories 14,948,766 8,261,454 10,580,281 7,997,925

Movements in provision forinventories are as follows:

Balance at the beginning of the financial year 250,000 — 50,000 —Provision made during the financial year 225,000 250,000 225,000 50,000

Balance at the end of the financial year 475,000 250,000 275,000 50,000

11. Short term investmentsThe Group The Company

2001 2000 2001 2000$ $ $ $

Quoted equity shares, at cost 217,631 235,238 34,203 34,203Less:Provision for diminution in value ( 27,337 ) ( 28,344 ) ( 18,781 ) ( 11,705 )

190,294 206,894 15,422 22,498

Market value of quoted shares 202,997 239,075 15,422 22,498

36


11. Short term investments (continued)The Group The Company

2001 2000 2001 2000$ $ $ $

Movements in provision for diminution invalue of short term investments areas follows:

Balance at the beginning of the financial year 28,344 16,233 11,705 2,695Provision made during the financial year 7,076 17,791 7,076 9,010Provision written-back during the financial year ( 8,083 ) ( 5,680 ) — —


12. Trade debtorsThe Group The Company

2001 2000 2001 2000$ $ $ $

Trade debtors 18,457,546 11,225,833 13,161,092 3,548,854Less: Provision for doubtful trade debts ( 490,987 ) ( 372,711 ) ( 88,568 ) ( 13,880 )

17,966,559 10,853,122 13,072,524 3,534,974

Movements in provision for doubtful trade debts are as follows:

Balance at the beginning of the financial year 372,711 288,864 13,880 13,880Provision made during the financial year 120,796 83,847 74,688 —Bad debts written-off against provision ( 2,520 ) — — —




13. Other debtors, deposits and prepaymentsThe Group The Company

2001 2000 2001 2000$ $ $ $

Other debtors 46,437 345,889 36,231 11,369Other deposits and prepayments 277,310 200,336 252,011 97,264Deposits for purchase of inventories 865,198 — 865,198 —

1,188,945 546,225 1,153,440 108,633

14. Due by/to subsidiariesThe Company

2001 2000$ $

Due by subsidiaries - non-trade 4,502,900 —Due by subsidiaries - trade 110,776 32,608

4,613,676 32,608

Due to subsidiary - non-trade 2,063,313 —

The amounts due by subsidiaries are unsecured and have no fixed terms of repayment. The amounts are interest-free exceptfor a balance of $4,136,931 which bears interest at the rate of 6.25% (2000: Nil%) per annum.

The amount due to a subsidiary is unsecured, interest-free and has no fixed terms of repayments.

15. Due by related company - non-trade

The amount due by a related company is unsecured, interest-free and has no fixed terms of repayment.

38


16. Cash and cash equivalents

Cash and cash equivalents included in the consolidated cash flow statement comprise the following balance sheet amounts:

The Group

2001 2000$ $

Fixed deposits with financial institutions 3,295,100 4,364,957Cash and bank balances 1,794,713 703,956Bank overdrafts ( 58,383 ) ( 1,989,807 )

5,031,430 3,079,106

The bank overdrafts of the subsidiaries are guaranteed by the Company. During the financial year, interest rates on bankoverdrafts ranged between 5.5% to 5.75% (2000: 6.25% - 6.50%) per annum.

17. Fixed assetsRenovation,

Leasehold Plant and Motor Office FurnitureBuilding Machinery Vehicles Equipment and Fittings Total

The GroupAt 1 January 2001Valuation 2,300,000 — — — — 2,300,000Cost — 1,271,948 1,094,727 453,240 526,622 3,346,537

2,300,000 1,271,948 1,094,727 453,240 526,622 5,646,537Additions — 64,094 591,848 642,155 635,641 1,933,738Disposals ( 2,300,000 ) — ( 84,329 ) ( 20,956 ) ( 432,494 ) ( 2,837,779 )

At 31 December 2001 — 1,336,042 1,602,246 1,074,439 729,769 4,742,496

Accumulated depreciationAt 1 January 2001 85,186 927,306 541,582 330,333 404,688 2,289,095Charge for the financial year 28,395 100,893 216,102 183,096 82,009 610,495Disposals ( 113,581 ) — ( 78,767 ) ( 2,549 ) ( 354,782 ) ( 549,679 )

At 31 December 2001 — 1,028,199 678,917 510,880 131,915 2,349,911



17. Fixed assets (continued)Renovation,

Leasehold Plant and Motor Office FurnitureBuilding Machinery Vehicles Equipment and Fittings Total

The GroupNet book value at31 December 2001 — 307,843 923,329 563,559 597,854 2,392,585

Net book value at31 December 2000 2,214,814 344,642 553,145 122,907 121,934 3,357,442

The CompanyAt 1 January 2001Valuation 2,300,000 — — — — 2,300,000Cost — 1,269,890 326,871 200,122 322,458 2,119,341

2,300,000 1,269,890 326,871 200,122 322,458 4,419,341Transfers from subsidiaries — 882 408,741 57,238 17,519 484,380Additions — 3,226 443,135 178,564 577,950 1,202,875Disposals ( 2,300,000 ) — ( 84,327 ) ( 2,300 ) ( 260,081 ) ( 2,646,708 )

At 31 December 2001 — 1,273,998 1,094,420 433,624 657,846 3,459,888

Accumulated depreciationAt 1 January 2001 85,186 926,130 182,467 134,451 217,119 1,545,353Charge for the financial year 28,395 93,343 187,150 99,601 74,011 482,500Disposals ( 113,581 ) — ( 78,767 ) ( 968 ) ( 185,428 ) ( 378,744 )

At 31 December 2001 — 1,019,473 290,850 233,084 105,702 1,649,109

Net book value at31 December 2001 — 254,525 803,570 200,540 552,144 1,810,779

Net book value at31 December 2000 2,214,814 343,760 144,404 65,671 105,339 2,873,988

(a) The leasehold building was valued at $2,300,000 by Knight Frank Pte Ltd on 15 January 1999 on the basis of openmarket value with existing use. The surplus arising on the revaluation of the leasehold building was credited to theasset revaluation reserve account. During the financial year, the leasehold building was disposed. The surplus arisingon revaluation of the leasehold building was transferred directly to retained profits.

(b) At the balance sheet date, the net book value of motor vehicles under hire-purchase agreements for the Group andthe Company amounted to $687,586 (2000: $410,341) and $687,586 (2000: $130,675) respectively.

40


18. SubsidiariesPlace of

Name of subsidiary/ country Equity Cost ofCountry of incorporation Principal activities of business holding investment

2001 2000 2001 2000% % $ $

Kim Seng Hardware & Commission agents and Singapore 100 100 3,063,941 3,063,941Oilfield Supply Pte Ltd trading in hardware(Singapore) products and oilfield

equipment. The companybecame dormant duringthe financial year

Aqua Terra Supply Trading in tools and Singapore 100 — 2,000,000 —(2001) Co. Pte Ltd equipment for the marine

oil and gas industry

KS Seafirst Marine Shipping agent Singapore 100 — 200,000 —Services Pte Ltd

5,263,941 3,063,941

19. InvestmentsThe Group The Company

2001 2000 2001 2000$ $ $ $

Investment in unquoted equity shares, at cost — 39,915 — —Provision for diminution in value — ( 39,915 ) — —

— — — —Club membership 80,000 80,000 80,000 —

80,000 80,000 80,000 —

During the financial year, the investment in unquoted equity shares was written-off against the provision for diminution invalue as a result of the disposal of the investment.



20. GoodwillThe Group

2001 2000$ $

Goodwill paid for the acquisition of businesses during the financial year 1,680,000 —Less: Amortisation for the financial year ( 250,016 ) —

1,429,984 —

21. Holding company

The holding company which is also the ultimate holding company is Kim Seng Holdings Pte Ltd, a company incorporated inSingapore.

22. Hire purchase creditorsThe Group The Company

2001 2000 2001 2000$ $ $ $

Within one year 143,116 88,611 143,116 32,489Between two to five years 455,834 282,871 455,834 47,728

598,950 371,482 598,950 80,217Interest allocated to future periods ( 88,962 ) ( 55,492 ) ( 88,962 ) ( 6,526 )

509,988 315,990 509,988 73,691

Included in:Current liabilities 126,316 77,261 126,316 29,834Non-current liabilities 383,672 238,729 383,672 43,857

509,988 315,990 509,988 73,691

42


23. Long term bank loan

(a) Interest rate

The interest rate payable on the loan is calculated as 2% plus the bank SWAP rate. During the financial year, interestrates ranged between 2.95% - 4.75% (2000: Nil%) per annum.

(b) Repayment terms

The loan is repayable in 11 quarterly instalments of $333,333 each and a final instalment of $333,337, commencing4 May 2001. The loan is guaranteed by a negative pledge over all the assets of the Company.

(c) Carrying amounts and fair values

The fair values are based on discounted cash flows using a discount rate based upon the borrowing rate which thedirectors expect would be available to the Group at the balance sheet date. The carrying amounts of current portionof the term loan approximates its fair value.

The carrying amounts and fair values of the non-current portion of the term loan are as follows:

The Group and The CompanyCarrying amounts Fair values

2001 2000 2001 2000$ $ $ $

Non-current term loan 1,666,669 — 1,591,133 —

(e) Maturity

Maturity of non-current term loan is as follows:

The Group and The Company

2001 2000$ $

Between 1 and 2 years 1,333,332 —Between 2 and 5 years 333,337 —

1,666,669 —



24. Fair values

The carrying amounts of the following financial assets and financial liabilities approximate their fair value: cash, investments,trade receivables and payables, other receivables and other payables, finance lease obligations and borrowings.

25. Share capital and share premium

(a) Authorised ordinary share capital

The authorised number of ordinary shares at the beginning and at the end of the financial year ended 31 December2001 was 200 million shares with a par value of $0.10 per share.

(b) Issued ordinary share capital2001 2000 2001 2000

Shares Shares $ $'000 '000

Balance at 1 January and31 December 108,000 108,000 10,800,000 10,800,000

26. Reserves

Reserves comprise the following:The Group The Company

2001 2000 2001 2000$ $ $ $

Asset revaluation reserve — 128,000 — 128,000Retained earnings 7,051,649 4,078,638 5,055,412 2,456,984

7,051,649 4,206,638 5,055,412 2,584,984

The movements in reserves are set out in the Statements of changes in equity.

44


27. DividendThe Company

2001 2000$ $

Ordinary dividends paidFinal dividend for the previous financial year of 5% (2000: 5%) net of tax at 24.5% 407,700 402,300

The directors have proposed a final dividend for 2001 of 6 cents per share amounting to a total of $489,240 net of tax at24.5%. These financial statements do not reflect this dividend payable, as this will be accounted for in the shareholders'equity as an appropriation of retained earnings in the next financial year.

28. Related party transactions

During the financial year, the following significant transactions took place between the Group and its related companies onterms agreed between the parties:

The Group

2001 2000$ $

Sales of finished goods to related companies 7,241 6,958Purchases of consumables from related companies 55,686 19,130Rental charges from holding company — 36,000Rental charges from a related company 764,874 —Sale of quoted shares to a director 14,657 —

29. Commitments

Commitments in relation to non-cancellable operating leases contracted for at the reporting date but not recognised asliabilities, are payable as follows:


2001 2000 2001 2000$ $ $ $

Not later than one financial year 535,739 23,962 412,884 —Later than one financial year but

not later than five financial years 71,369 — 71,369 —

607,108 23,962 484,253 —



30. Group segmental information

Segment information

Primary reporting format - business segmentsOil and gas Marine Others Group

$ $ $ $

Year ended 31 December 2001

Revenues 37,673,981 5,067,927 11,857,763 54,599,671

Segment result 3,057,370 405,434 903,690 4,366,494

Operating profit 4,366,494Finance income 103,224Finance costs ( 394,184 )

Profit before tax 4,075,534Tax ( 822,823 )

Net profit 3,252,711

Segment assets 23,346,656 4,219,897 8,891,132 36,457,685Unallocated assets 6,980,882

Consolidated total assets 43,438,567

Segment liabilities 10,436,791 1,455,111 2,666,828 14,558,730Unallocated liabilities 9,474,761

Consolidated total liabilities 24,033,491

Capital expenditure 994,922 296,012 642,804 1,933,738Depreciation 371,055 44,302 195,138 610,495

46


30. Group segmental information (continued)Oil and gas Marine Others Group

$ $ $ $

Year ended 31 December 2000

Revenues 24,337,184 1,475,112 9,268,644 35,080,940

Segment result 2,022,879 121,563 167,726 2,312,168

Operating profit 2,312,168Finance income 130,615Finance costs ( 108,458 )

Profit before tax 2,334,325Tax ( 753,372 )

Net profit 1,580,953

Segment assets 15,998,467 966,213 5,806,821 22,771,501Unallocated assets 5,602,549

Consolidated total assets 28,374,050

Segment liabilities 5,626,489 233,020 1,056,448 6,915,957Unallocated liabilities 4,898,028

Consolidated total liabilities 11,813,985

Capital expenditure 408,236 17,739 106,433 532,408Depreciation 329,938 17,623 105,739 453,300

The business segments of the Group were revised in the current financial year to reflect the profile of the risks and returns ofthe Group more accurately. In the current year, the Group is organized into three main business segments:

• Oil and gas• Marine• Others

In previous years, the main business segments of the Group were:

• Oil and gas processing equipment• Hydraulic, instrumentation, spares and parts• General hardware



30. Group segmental information (continued)

Prior year's comparatives have been reclassified to conform with the current year's presentation.

There are no sales or other transactions between the business segments. Segment assets consist primarily of fixed assets,inventories, receivables and operating cash. Segment liabilities comprise operating liabilities and exclude trust receipts, bankoverdrafts, hire purchase creditors and taxation. Capital expenditure comprises additions to fixed assets.

Secondary reporting format - geographical segments

The Group's three business segments operate in three main geographical areas: Singapore, the People's Republic of Chinaand other regions.

Revenue Total assets Capital expenditure

2001 2000 2001 2000 2001 2000$ $ $ $ $ $

Singapore 24,191,126 14,434,881 33,940,443 22,124,012 1,927,546 337,961The People's

Republic of China 21,420,689 17,788,699 7,033,250 5,632,464 1,096 188,441Other regions 8,987,856 2,857,360 2,464,874 617,574 5,096 6,006

54,599,671 35,080,940 43,438,567 28,374,050 1,933,738 532,408

With the exception of Singapore and the People's Republic of China, no other individual country contributed more than 10%of the consolidated revenues and assets.

Revenue is based on the country in which the customer is located. Total assets and capital expenditure are shown by thegeographical area in which the assets are located.

31. Authorisation of financial statements

These financial statements were authorised for issue in accordance with a resolution of the directors dated on 25 April 2002.

48

Distribution of Shareholders by Size of Shareholdings

Size of Shareholdings No. of Holders % of Holders No. of Shares % of Shares

1 - 1,000 531 31.05 531,000 0.491,001 - 10,000 816 47.72 4,679,000 4.33

10,001 - 1,000,000 359 21.00 20,646,000 19.121,000,001 - and above 4 0.23 82,144,000 76.06

Grand Total 1,710 100.00 108,000,000 100.00

Substantial Shareholders(as in the Register of Substantial Shareholders)

Direct DeemedInterest Interests

Name (No. of shares held) % (No. of shares held) %

Kim Seng Holdings Pte Ltd 54,800,000 50.74 - -Kian Ann Engineering Ltd 25,000,000 23.15 - -Tan Kim Seng (1) - - 54,800,000 50.74Tan Hoo Lang (2) - - 54,800,000 50.74Tan Fuh Gih (3) - - 54,800,000 50.74Tan Wei Min (4) - - 54,800,000 50.74

(1) Deemed to be interested as Mr Tan Kim Seng is the beneficial owner of 24 percent of the issued share capital of Kim SengHoldings Pte Ltd.

(2) Deemed to be interested as Mr Tan Hoo Lang is the beneficial owner of 22 percent of the issued share capital of Kim SengHoldings Pte Ltd.

(3) Deemed to be interested as Mr Tan Fuh Gih is the beneficial owner of 22 percent of the issued share capital of Kim SengHoldings Pte Ltd.

(4) Deemed to be interested as Mr Tan Wei Min is the beneficial owner of 20 percent of the issued share capital of Kim SengHoldings Pte Ltd.

Statistics of ShareholdersAt 15 April 2002


List of Twenty Largest Shareholders

S/N Name of Shareholder No. of Shares Shares

1 KIM SENG HOLDINGS PTE LTD 54,800,000 50.742 KIAN ANN ENGINEERING LTD 25,000,000 23.153 DBS VICKERS SECS (S) PTE LTD 1,177,000 1.094 PHILLIP SECURITIES PTE LTD 1,167,000 1.085 G K GOH STOCKBROKERS PTE LTD 930,000 0.866 KIM ENG ONG ASIA SECS PTE LTD 823,000 0.767 HENG CHIANG MENG 800,000 0.748 OCBC SECURITIES PRIVATE LTD 680,000 0.639 UNITED OVERSEAS BANK NOMINEES PTE LTD 577,000 0.5310 CITIBANK CONSUMER NOMINEES PTE LTD 562,000 0.5211 DBS NOMINEES PTE LTD 506,000 0.4712 SINGAPORE NOMINEES PTE LTD 487,000 0.4513 UOB KAY HIAN PTE LTD 427,000 0.4014 HO BING HOE 337,000 0.3115 HONG LEONG FINANCE NOMINEES PTE LTD 303,000 0.2816 OVERSEA CHINESE BANK NOMINEES PTE LTD 260,000 0.2417 TAN SIN LEE 255,000 0.2418 FONG YENG FATT 246,000 0.2319 WANG LEE WAH 225,000 0.2120 OUB SECURITIES PTE LTD 220,000 0.20

TOTAL: 89,782,000 83.13

Statistics of ShareholdersAt 15 April 2002

50

Notice of Annual General Meeting

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

(Resolution 9)

NOTICE IS HEREBY GIVEN THAT the Third Annual General Meeting of the Company will be held at No. 4 Tuas Avenue 5, Singapore639331 on 20 May 2002 at 10.00 a.m. for the purpose of transacting the following business:-

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Accounts for the financial year ended 31 December 2001 together withthe Directors’ Report and the Auditors’ Report thereon.

2. To declare a First and Final Dividend of 6% less tax for the year ended 31 December 2001.

3. To approve Directors’ fees of S$50,000.00 for the year ended 31 December 2001.

4. a) To re-elect Mr Tan Kim Seng, who retires by rotation in accordance with Article 91 of the Articles ofAssociation of the Company.

b) To record the retirement of Mr Sitoh Yih Pin, who retires by rotation in accordance with Article 91 ofthe Articles of Association of the Company and will not be seeking re-election.

5. To re-elect Mr Goh Boon Chye, who retires in accordance with Article 97 of the Articles of Association ofthe Company.

6. To re-elect Mr Lee Beng Cheng, Billy, who retires in accordance with Article 97 of the Articles of Associationof the Company. [see Explanatory Note (i)]

7. To re-elect Mr Wong Meng Yeng, who retires in accordance with Article 97 of the Articles of Associationof the Company. [see Explanatory Note (ii)]

8. To re-appoint Messrs PricewaterhouseCoopers as Auditors and to authorise the Directors to fix theirremuneration.

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following as Ordinary Resolutions, with or without modifications:

9. “That pursuant to Section 161 of the Companies Act Cap. 50, the Directors of the Company be and arehereby authorised to allot and issue shares in the Company at any time, to such persons, upon suchterms and conditions and for such purposes as the Directors may in their absolute discretion deem fitPROVIDED ALWAYS THAT the aggregate number of shares to be issued pursuant to this Resolutiondoes not exceed fifty (50) per cent of the total issued share capital of the Company for the time being, ofwhich the aggregate number of shares that may be issued other than on a pro-rata basis to existingshareholders shall not exceed twenty (20) per cent of the total issued share capital of the Company forthe time being and that such authority shall continue in force until the conclusion of the next AnnualGeneral Meeting of the Company or the date by which the next Annual General Meeting of the Companyis required by law to be held, whichever is the earlier.” [see Explanatory Note (iii)]


Notice of Annual General Meeting

10. To transact any other business.

BY ORDER OF THE BOARD

Foo Soon SooLim Ka BeeCompany Secretaries

Singapore, 2 May 2002

Explanatory Notes on Business to be Transacted

(i) Mr Lee Beng Cheng, Billy, if re-elected, will remain as a Member of the Audit Committee and will be considered as anindependent director pursuant to Clause 902(4)(a) of the Listing Manual of the Singapore Exchange Securities TradingLimited.

(ii) Mr Wong Meng Yeng, if re-elected, will remain as a Member of the Audit Committee and will be considered as an independentdirector pursuant to Clause 902(4)(a) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

(iii) The ordinary resolution proposed in item 9 above, if passed will empower the Directors of the Company from the date of theabove Meeting until the next Annual General Meeting to issue shares in the Company up to an amount not exceeding inaggregate 50 percent of the issued share capital of the Company for the time being of which the aggregate number of sharesthat may be issued other than on a pro-rata basis to existing shareholders shall not exceed twenty (20) per cent of the issuedshare capital of the Company for the time being for such purposes as they consider would be in the interests of the Company.This authority will, unless previously revoked or varied at a general meeting, expire at the next Annual General Meeting of theCompany.

Notes:

1) A member entitled to attend and vote at this meeting is entitled to appoint not more than two proxies to attend and vote in hisstead.

2) Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of hisholding to be represented by each proxy.

3) A proxy need not be a member of the Company.4) A corporation which is a member of the Company may authorise by resolution of its directors or other governing body, such

person as it thinks fit to act as its representative at the meeting.5) The instrument appointing a proxy must be deposited at the registered office of the Company at No. 4 Tuas Avenue

5, Singapore 639331 not less than 48 hours before the time appointed for holding the meeting.

52

This page is intentionally left blank.


I/We (Name)of (Address)being a member/members of KS Tech Ltd (the “Company”) hereby appoint:

NRIC/ Proportion ofName Address Passport No. Shareholding (%)

(a)

And/or (delete as appropriate)

(b)

or failing *him/her, the Chairperson of the Annual General Meeting ("AGM") of the Company as my/our proxy/proxies to vote for me/us on my/our behalf and, if necessary, to demand a poll at the AGM of the Company, to be held at No. 4 Tuas Avenue 5, Singapore639331 on 20 May 2002 at 10.00 a.m. and at any adjournment thereof.

I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the AGM as indicated hereunder. If nospecific directions as to voting are given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will onany other matter arising at the AGM.

To be used on a show To be used in theNo. Resolutions of hands event of a poll

For* Against* No. of No. of VotesVotes for** Against**

Ordinary Business1 To receive and adopt Directors’ Report,

Auditors’ Report and Audited Accounts2 To approve First & Final Dividend3 To approve Directors’ fees4 To re-elect Mr Tan Kim Seng as a Director5 To re-elect Mr Goh Boon Chye as a Director6 To re-elect Mr Lee Beng Cheng, Billy as a Director7 To re-elect Mr Wong Meng Yeng as a Director,8 To re-appoint Auditors and to authorise the Directors

to fix their remunerationSpecial Business

9 To approve the Ordinary Resolution pursuant toSection 161 of the Companies Act, Chapter 50.

* Please indicate your vote "For" or "Against" with an "x" within the box provided.** If you wish to exercise all your votes "For" or "Against", please indicate with an "x" within the box provided. Alternatively, please

indicate the number of votes as appropriate.

Dated this day of 2002.

Signature(s) of Member(s)/Common SealIMPORTANT

PLEASE READ NOTES OVERLEAF

Important :1. For investors who have used their CPF monies to buy KS Tech Ltd shares, this

Annual Report 2001 is forwarded to them at the request of their CPF ApprovedNominees and is sent solely For Information Only.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective forall intents and purposes if used or purported to be used by them.

3. CPF investors who wish to vote should contact their CPF Approved Nominees.

Total Number of Shares held

KS TECH LTD(Incorporated in the Republic of Singapore)

PROXY FORM

✄

Notes:

1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead.A proxy need not be a member of the Company.

2. Where a member appoints more than one proxy, he should specify the proportion of his shareholding (expressed as apercentage of the whole) to be represented by each proxy and if no percentage is specified, the first named proxy shall bedeemed to represent 100 per cent of the shareholding and the second named proxy shall be deemed to be an alternate to thefirst named.

3. A member should insert the total number of shares held. If the member has shares entered against his name in the DepositoryRegister (as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares.If the member has shares registered in his name in the Register of Members of the Company, he should insert that numberof shares. If the member has shares entered against his name in the Depository Register and registered in his/her name inthe Register of Members, he should insert the aggregate number of shares. If no number is inserted, the instrument appointinga proxy or proxies will be deemed to relate to all shares held by the member.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 4 TuasAvenue 5, Singapore 639331 not less than 48 hours before the time set for the Meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or by his/her attorney duly authorisedin writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either underits common seal or under the hand of its attorney or a duly authorised officer.

6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power ofattorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrumentof proxy, failing which the instrument may be treated as invalid.

7. A corporation which is a member may, in accordance with Section 179 of the Companies Act, Cap. 50 of Singapore, authoriseby resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting.

8. The Company shall be entitled to reject the instrument appointing a proxy or proxies, if it is incomplete, improperly completed,illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified onthe instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, theCompany may reject any instrument appointing a proxy or proxies if the member, being the appointor, is not shown to haveshares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting,as certified by the Central Depository (Pte) Limited to the Company.

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Transcript of KS TECH LTDir.zaobao.com.sg/ksenergy/sim-pages/kstech2001ar.pdfOn 6 December 2001, Mr Chew Thiam...